Villaraigosa Puts Bankruptcy “Gun to Head’ of Council on DWP Rate Hikes
Mayor Villaraigosa sent a letter to the City Council Tuesday warning that rejection of the DWP rate hikes of 20 to 30 percent would cause the city to run out of cash and face bankruptcy within four months because the utility would not be able to transfer its full “surplus” of more than $200 million from the power fund, the Times reported.
Council Unanimously Takes Jurisdiction
VIDEO ONE:
Councilwoman Jan Perry opened the City Council’s consideration Tuesday of a motion to take jurisdiction of the DWP rate hikes approved last week by reading a letter she gave to each member:
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VIDEO TWO
VIDEO THREE
VIDEO FOUR
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VIDEO SIX
VIDEO SEVEN
Unanimous! Excellent!
And thanks for posting the video, Ron.
What’s so bad about the city filing for bankruptcy? It sure beats having a large number of the city’s residents filing bankruptcy as they are pushed over the precipice due to outrageously higher LADWP bills. Bankruptcy would tame the union contracts and get costs in line with revenues in an orderly and transparent manner.
The reasons the Mayor doesn’t like this option is because it would further soil his already putrid record of managing the city, put him in the path of his union friends and ruin any chance of running for higher office. Too bad.
Disgrace. Deception.
Boy, am I confused about the purpose of raising power rates. When the Mayor issued his presser, it was about being the greenest city in the country. At the DWP Board Special Meeting it was about saving the DWP bond rating. This week, the Mayor writes to City Council and says it is about saving the City from bankruptcy. Those kind of clear and consistent messages pretty much say: “Hey, we dunno!”
Walter Moore said it all — the DWP made $356 million in profit last year, and runs profit margins well above private sector energy providers. If it is necessary or important to get more “green” power, then those profits should be used to achieve that. It’s time that the city stop siphoning off DWP money to hide its structural deficit. The DWP is not a money-printing machine. Ratepayers have had enough of the bullshit. Balance the damn budget….
In the one video, Kim Kraft, an assistant business manager for a IBEW stated that they have 20% unemploymnet among its membership. If that is a true statement, he and the rest of the union should be totally incensed at union and DWP management for allowing the hiring of all those city workers that were “laid” off.
Richard Fisk
This was one of the most interesting, satisfying meeting that I have attended. Our Council members deserve a round of thanks for not giving in to the threat of bankruptcy and for agreeing with the conclusions of PA Consulting.
The next GM needs to be vetted more carefully. The Mayor’s advisors seem to keep us getting into this mess.
In the one video, Kim Kraft, an assistant business manager for a IBEW stated that they have 20% unemploymnet among its membership. If that is a true statement, he and the rest of the union should be totally incensed at union and DWP management for allowing the hiring of all those city workers that were “laid” off.
You fail to understand that IBEW is a nationwide parent organization for electrical workers and only one of its branches, Local 18, has DWP members.
Kim Kraft is from Local 11, totally different group.
It’s time that the city stop siphoning off DWP money to hide its structural deficit.
I totally agree, but with the current economic state of the city, it won’t happen any time soon, for practical as well as political reasons.
Our Council members deserve a round of thanks for not giving in to the threat of bankruptcy and for agreeing with the conclusions of PA Consulting.
They need to come up with a solution that balances the need for low rates with the need to avoid the State penalties that will automatically cause rates to skyrocket. This is the same group of council members who dicked around on the medical marijuana issue for 2 and a half years without making a decision. This is also the same group that needs DWP revenue transferred to the general fund because they can’t control their spending. Despite the fact they called out the mayor, politically it’s probable they’ll just delay for awhile and end up agreeing to the rate hikes anyway because there isn’t really any other solution. It’s also probable that those not seeking reelection might argue vehemently against the rate hikes, making the ratepayers eat the State fine a few years from now because they know they’ll no longer be in office and have immediate accountability.
The next GM needs to be vetted more carefully.
I’ll add that it doesn’t matter who the GM is or how pure his agenda is because of this concept called leverage. Just like your boss has leverage over you and expects you to do what he wants or face the reprisal of getting fired, the GM has to stay on the mayor’s good side or risk losing his job.
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